Saudi’s Alujain sells unit stake for $500m to lower debt

Saudi industrial group Alujain Corporation has agreed to sell a 35 percent stake in its subsidiary, National Petrochemical Industrial Company (Natpet), for SAR1.87 billion ($498.60 million).

Basell International Holdings BV, a New York Stock Exchange-listed LyondellBasell Industries subsidiary, will purchase the stake.

The cash proceeds will be used to repay the current and future financial obligations, Alujain said in a statement to the Saudi stock exchange.

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The deal’s completion is contingent upon meeting the agreement terms and obtaining regulatory approvals.

As part of the deal, LyondellBasell Industries will invest in a new venture with Alujain involving an investment of SAR7.5 billion. The investment will be made after completing the current detailed engineering design phase and evaluating the economic feasibility study for the new project.

The deal aims to support Alujain’s expansion plans into high-end co-polymer grades and specialised polypropylene compounds of high value, to help local specialty plastics conversion manufacturers.

Alujain owns 98.7 percent of Natpet, which has a book value of SAR 2.53 billion as of November 30, 2023.

Natpet’s propylene/polypropylene complex in Yanbu Industrial City has a nameplate production capacity of 400,000 tons per year of polypropylene.

The subsidiary reported net profits of SAR412 in 2020, SAR 519 in 2021 and SAR 261 million in 2022.